While historically consumer packaged goods (CPG) organizations have made significant investments in data collection and integration, much of the data stored in their IT infrastructures has not been analyzed or deployed to further the firms' business performance. Those enterprises that learn to effectively harness the vast quantities of information generated by their IT systems - both within and outside the corporation - will enjoy a substantial competitive advantage.
Business Intelligence for
Consumer Packaged Goods:
Actionable Insights for Business Decision Makers
by Don Tapscott
Brought to you by Business Objects (an SAP company), SAP and Intel. Business Intelligence for Consumer Packaged Goods: 1 Actionable Insights for Business Decision Makers
Executive Summary when it comes time to bring a product offering to market. Nevertheless, good business intelligence enables a better WHILE HISTORICALLY consumer packaged goods (CPG) understanding of consumers and their preferences; thereby organizations have made significant investments in data helping marketers deliver meaningful, authentic, and collection and integration, much of the data stored in their targeted customer messages that rise above the noise of an IT infrastructures has not been analyzed or deployed to increasingly cluttered marketplace. further the firms' business performance. What is needed is a new generation of business intelligence (BI) tools and Finally, although the logistics of a distributed global applications that are capable of integrating cross- and supply chain have created new opportunities for creating inter-enterprise processes and information. The resulting greater alignment between supply and demand, without intelligence would enable CPG companies to make better proper business intelligence, account teams often fail to operating decisions, increase company transparency, obtain adequate data to derive a true picture of consumer change business processes, and drive overall performance. demand for the companies' products within the retail Those enterprises that learn to effectively harness the vast channel. For example, certain items could be out of stock, quantities of information generated by their IT systems- while others may not be selling at all?both situations lead both within and outside the corporation-will enjoy a to lost sales opportunities and create downstream substantial competitive advantage. challenges when attempting to justify future shelf space with the retailer. Incredibly, the average out of stock rate for items on 1.0 Value Proposition promotion can sometimes be as high as 30 per cent! Only After decades of leading product innovation, the consumer by understanding consumer demand can marketers ensure packaged goods industry is facing a number of escalating that goods will be available for consumers when and challenges that are inhibiting its ability to reach consumers where they are ready to buy. and convert them to customers. Companies without a proper plan to address issues of First, the growing quantity of data maintained by CPG data management, marketing, and logistics, will companies has yet to significantly improve the industry's experience negative results: declining consumer understanding of consumer needs. Managers continue to mindshare, profits, and shareholder value. Indeed, New rely on guesswork: risking bringing the wrong products to Paradigm's research shows that existing business market, poorly executing on marketing campaigns and intelligence solutions are insufficient to address these promotions, or distributing them to the wrong locations. It problems. Perhaps this explains why recent surveys of is not enough for marketers to understand what customers CIO spending show that BI and data warehousing (DW) want today; they must also be able to anticipate have become a significant spending priority. (In January customers' needs, and in so doing, develop timely, 2007, independent research revealed that 44 per cent of innovative, market leading products ahead of the CIOs identified BI/DW as a top spending priority going competition. Mike Szafranski, director of business forward.) intelligence and enterprise content management for Kraft In this paper, we discuss how technological advances Foods, lives this challenge: are enabling improved decision making across three broad "On the marketing side, the goals are much less about axes: simplicity and relevance, agility and integration. cost cutting and more about building the relationship New interfaces and approaches to business intelligence with the consumer, meeting the consumer's demands are empowering more decision makers by providing through innovation, [driving] new product relevant data within a user-friendly interface. Meanwhile, development and using this approach as a platform for new technology advancements, such as in-memory BI, are ... [download for more]
